The EURGBP pair, which is currently trading at 0.85578, is decreasing in value due to concerns over the ECB’s potential decision to implement additional interest rate increases, which could impact the overall economic forecast.

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• EUR/GBP falls back as expectations of more interest rates from the ECB threaten the economic outlook.

The pair currently trades last at 0.85578.

The previous day high was 0.8598 while the previous day low was 0.8555. The daily 38.2% Fib levels comes at 0.8572, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8582, expected to provide resistance.

The EUR/GBP pair falls back as a pullback move to near 0.8570 meets offers in the European session. The cross continues to bleed as investors hope that the European Central Bank (ECB) has to raise interest rates further so that inflation can be tamed and the trading bloc can avoid potential risks of a recession.

Eurozone preliminary Harmonized Index of Consumer Prices (HICP) for August expanded as the labor market remained hot, making it difficult for policymakers to convince workers to shift to slower wage growth.

Eurostat reported that monthly headline inflation expanded at a higher pace of 0.6% while investors anticipated a deflation of 0.1% as recorded for July. Core inflation that excludes volatile food and oil prices expanded at a 0.3% pace as expected by market participants. In July prices of core goods were softened by 0.1%. On an annual basis, the economic data softened to 5.3% as expected from July’s reading of 5.5%.

About the interest rate outlook, ECB policymaker Francois Villeroy de Galhau said the central bank is open to various options at the next and upcoming rate meetings. He further added keeping rates high long enough matters more than the level.

Meanwhile, the Pound Sterling remains in the driving seat as more interest rate hikes from the Bank of England (BoE) cannot be ruled out. Two more interest rate hikes of 25 basis points (bps) are expected this year as investors see the interest rate peak at 5.75%.

On the economic front, S&P Global reported the Manufacturing PMI for August at 43.0, higher than expectations and July’s reading of 42.5.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8558 at the time of writing. Pair opened at 0.8556 and is trading with a change of 0.02 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8582, 50 SMA 0.8585, 100 SMA @ 0.8638 and 200 SMA @ 0.8714.

The previous day high was 0.8598 while the previous day low was 0.8555. The daily 38.2% Fib levels comes at 0.8572, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8582, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8541, 0.8527, 0.8498
• Pivot resistance is noted at 0.8584, 0.8613, 0.8627

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